The Only Tip You Need to Break Free of Tax Debt
If you’re falling behind on your tax instalments – or you have an outstanding tax bill that needs paying – not only will ignoring your tax debt not make it go away, it will make your money problems much worse.
The smartest move you can make in the face of tax debt is to pay it off as soon as possible. And since there’s a good chance the value of your property has increased since you bought it, the equity you hold in your home may be your key to breaking free of tax debt today.
Why You Should Never Ignore Your Tax Payments
Paying taxes late isn’t exactly uncommon.
As a matter of fact, with more Canadians than ever failing to make a payment when they file their taxes, the amount we collectively owe the Canada Revenue Agency reached a record high of $43.8 billion in 2018!
But failing to pay your taxes in full and on time can lead to all sorts of financial headaches.
To begin with, the CRA will charge daily compounding interest on the entire amount you owe – including any penalties they’ve added. And if your outstanding balance goes unpaid for too long, they also have the right to:
- withhold your child tax or GST credits,
- garnish your wages,
- freeze your bank accounts and investments, and
- issue a lien against any properties you own
In other words, the longer you put off paying your taxes, the larger and faster your tax debt will grow.
How Home Equity Can Help You Break Free of Tax Debt
When you can’t pay what you owe, the CRA may allow you to make smaller payments over a period of time until your tax arrears – plus any applicable interest – are paid off.
Not everyone will qualify for such an arrangement, however. And you’ll likely need to show you’ve tried to repay what you owe by borrowing the money you need.
As it turns out, tax debt is behind much of the borrowing that goes on in today’s lending industry. But it’s important to understand that:
- banks are no longer willing to make unsecured loans for tax payments, and
- many borrowers will struggle to meet their stringent credit and income requirements for securing a second mortgage
So if you’re a homeowner looking to break free of tax debt, here’s the only tip you really need:
Applying for a mortgage loan from Alpine Credits makes it easy to tap into your home equity – even if the banks turned you down.